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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

Table Of Contents
Tables.................................................................................................. 3
Figures ................................................................................................ 3
The Global Learning Technology Investment Patterns ........................ 4
Scope of this Whitepaper: What We Don't Track and What We Do Track ..... 5
What We Do Not Track .......................................................................................... 5
What We Do Track ................................................................................................ 6
New Interest in Location-based Learning: Mapping Companies Attract Unprecedented Funding........ 7
Cognitive Learning in the Spotlight: Spike in Investments in Behavior Modification Companies ........ 9

Sources of Investment Activity Information .............................................. 11

Investment Patterns in Context: The Longitudinal Perspective ......... 11
Blowing Past the $3 Billion Threshold ....................................................... 12
The China-India-Brazil Juggernaut ............................................................ 12

Opening the Floodgates: Unprecedented Deal Flows in 2015 ............ 13
Funding Amounts Over $50 million in First Three Quarters of 2015 .. 16
Retail Education: Consumer-facing Companies Still Attracting
Investments ...................................................................................... 18
Which Consumer-facing Suppliers Attract Investment? ............................ 19

Corporate-facing Suppliers Make a Comeback ................................... 21
Spike in Investments for Three Learning Technology Products ......... 22
All Eyes on China, India, and Brazil ................................................... 23
All Roads Continue to Lead to China .......................................................... 24
India Learning Technology Investment Activity Heating Up ...................... 29
Brazil Still Attractive Despite Headwinds................................................... 33

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

Tables
Table 1 – 2015 Learning Technology Funding Amounts and Total Number of
Deals by Month .............................................................................................. 14
Table 2 – Learning Technology Companies that Obtained $50 Million or More in Funding in the First Three Quarters of 2015 (in US$) ...................................... 16
Table 3 - Learning Technology Companies in China that Obtained Funding in the First Three Quarters of 2015 (in US$) ......................................................... 25
Table 4 - Learning Technology Companies in India that Obtained Funding in the First Three Quarters of 2015 (in US$) ......................................................... 29
Table 5 - Learning Technology Companies in Brazil that Obtained Funding in the First Three Quarters of 2015 (in US$) ......................................................... 34

Figures
Figure 1 – 1997 through Q1-Q3/2015 Global Private Investment in Learning
Technology Companies (in US$ Millions) ............................................................. 4
Figure 2 – Ambient Insight's Learning Technology Research Taxonomy ................... 6
Figure 3 - 1997 to Q1-Q3 2015 Investments Made to Cognitive Learning
Companies (in US$ Millions) .............................................................................. 9
Figure 4 – 2010 to Q1-Q3 2015 Number of Private Investment Deals Made with Learning Technology Suppliers .................................................................. 13
Figure 5 – 2012 to Q1-Q3 2015 Total Number of Private Investment Deals to
Learning Technology Companies by Target Customer.......................................... 15
Figure 6 – Full-year 2014 and Q1-Q3 2015 Private Investment by Target
Customer Type .............................................................................................. 18
Figure 7 – Full-year 2014 and Q1-Q3 2015 Total Number of Private
Investment Totals to Consumer-facing Learning Technology Companies by
Product Type ................................................................................................. 20
Figure 8 - 2010 to Q1-Q3 2015 Investments in Corporate-facing Learning
Technology Companies (in US$ Millions) ........................................................... 21
Figure 9 - 2012 to Q1-Q3 2015 Private Investments by Seven Learning
Product Types (in US$ Millions) ........................................................................ 22
Figure 10 – Q1-Q3 2015 Private Investment to Chinese Learning Technology
Companies by Category (in US$ Millions) .......................................................... 27

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

The Global Learning Technology Investment
Patterns
The investments made to learning technology companies in the first three quarters of
2015 were the highest in the history of the learning technology industry and far exceed the total amount for the entire year of 2014. This is the first time in the history of the industry that investments broke the $3 billion threshold. Between January and September 2015, a total of $$3,761,391,600 was invested in learning technology companies across the globe.
This is astonishing considering that the total global investments made to learning technology companies for the entire year of 2014 was $2.42 billion, which in itself was a record in the industry.
Figure 1 – 1997 through Q1-Q3/2015 Global Private Investment in Learning Technology
Companies (in US$ Millions)

Beyond the breathtaking investment total, the other striking investment pattern was the massive number of deals compared to previous years. There were 473 deals made with learning technology companies between January and September 2015; deal flow is dramatically higher compared to previous years.

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

Scope of this Whitepaper: What We Don't Track and
What We Do Track
The investment totals in this whitepaper include seed, angel, venture capital, and private equity. The totals do not include government grants, NGO grants, or corporate foundation CSR grants. This whitepaper does not include investments made by non-profit educational institutions unless the investments are made to commercial spinoffs. This analysis does not include leveraged buyouts or acquisitions made by investment firms.
Once an investment firm takes a majority stake in a company, Ambient Insight defines that as an acquisition, not an investment.

What We Do Not Track
We do not track investments made to print-based or brick-and-mortar education companies. We do not include non-instructional technology such as hardware, student information systems, back-office IT systems, front-office systems, student services platforms (retention, course finders, etc.), student engagement platforms, classroom equipment, student portfolios, education supplies, student loan and tuition platforms
(fintech), facilities management software, program management systems, text messaging and mobile alert systems, or institutional administrative systems.
There are certainly significant revenue opportunities for many of these products, but they fall outside the purview of Ambient Insight's Learning Technology Research Taxonomy.
As a leading indicator, private investment is one of the variables used in Ambient
Insight's predictive analytics. Ambient Insight does not calibrate market forecasts for these types of products, which is why they are not included. Examples of funded companies that we do not track in our tallies include:


A company called SoFi, which received a $200 million round in February 2015.
They market a peer-to-peer student loan lending platform in the higher education segment. They also finance mortgages. A student loan startup called
CommonBond raised $35 million in September 2015. These solutions are more accurately defined as financial technology (fintech), not learning technology.



US-based AltSchool raised $100 million in May 2015. The company places a great deal of emphasis on technology and makes extensive use of learning technology in their physical classrooms. But it is a classroom-based brick-and-mortar business model; they do not sell retail learning technology products. Many private and alternative schools develop innovative learning technology for use in their classrooms, but they cannot be categorized as commercial learning technology companies. 

A company called Civitas Learning obtained $60 million in funding in September
2015. The products they sell are often referred to as student engagement or retention management technologies and they are not used directly in instruction.
"Civitas Learning develops software designed to assist at-risk college students in selecting courses and majors." The company indicated that they would use the funds "to expand market share with acquisitions and improve our predictive analytics platform."

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

What We Do Track
The whitepaper only covers investments made to learning technology companies that develop products directly involved in the knowledge transfer process. Ambient Insight specializes exclusively in forecasting revenues for learning technology products that enhance or facilitate knowledge transfer (also known as behavior modification).
In systematic approaches to instructional design, knowledge transfer is an experiential behavioral modification process of transmitting new knowledge and skills to a learner; learning about something and learning to do something.
Figure 2 – Ambient Insight's Learning Technology Research Taxonomy

Over several decades, Ambient Insight principals have refined a sophisticated and precise product categorization schema based on pedagogical principles, knowledge engineering systems, data science, and information architecture.
The research taxonomy is the backbone of an extensive quantitative data repository maintained for over ten years by Ambient Insight. It is the foundation of a classification system that enables Ambient Insight to identify, catalog, and index addressable revenue opportunities for suppliers selling specific products to particular buying segments in 120 countries across seven regions on the planet.

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

The purpose of our taxonomy is to provide tactical precision to suppliers competing in a complex global market. Ambient Insight's Research Taxonomy defines seven learning technology product types:







Self-paced eLearning (courseware)
Collaboration-based Learning (live online classes and tutoring)
Digital Reference-ware (digital eTextbooks, instructional audio, lecture video, diagrams, dictionaries, maps)
Simulation-based Learning
Game-based Learning
Cognitive Learning (behavior modification)

A detailed description of these learning products types is provided in Ambient Insight's
Research Taxonomy. As of August 2015, we track the learning technology markets and the investment patterns in 120 countries.
Ambient Insight was founded in 2004 by the original members of the Advanced
Knowledge Engineering team that built the Microsoft Online Learning Institute (MOLI), the world’s first international commercial eLearning business, which launched in 1995.
Ambient Insight's Chief Research Officer and co-founder, Sam S. Adkins, has worked in the learning technology industry since 1983, including four years in AT&T's central electronic training division and eight years at Microsoft.

New Interest in Location-based Learning: Mapping Companies Attract
Unprecedented Funding
In the first three quarters of 2015, $72.0 million was invested in ten cartographic and mapping companies. In Ambient Insight's taxonomy, these companies are defined as
Digital Reference-ware suppliers.
We include Mapbox in our tallies, which is a custom online map provider that garnered
$52.5 million in funding in June 2015. Maps are, by definition, reference-based learning material. "A map is a graphic representation that facilitates a spatial understanding of things, concepts, conditions, processes, or events in the human world" (Ralph Ehrenberg,
Library of Congress).
Maps are inherently related to learning in the same way recipes, product manuals, flowcharts, periodic tables, architectural diagrams, star charts, schematics, dictionaries, thesauri, or phrasebooks are related to learning.
Reading a map is a learning experience, even if it is just trying to get directions to a restaurant or a museum. Step-by-step directions are formally defined as procedural learning in instructional design.
Mapbox powers the National Geographic City Guides. National Geographic defines a map as a "symbolic representation of selected characteristics of a place, usually drawn on a flat surface. Maps present information about the world in a simple, visual way. They teach about the world by showing sizes and shapes of countries, locations of features, and distances between places."

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

A company called CartoDB obtained $23 million in funding in September 2015. According to the company, "CartoDB is the next generation location intelligence and data visualization engine that enables the transformation of location data into insights. Your mapping adventure becomes an interactive learning experience."
Maps and atlas globes are instructional materials that are integral to learning geography and are ubiquitous in classrooms across the planet. As Google puts it, "With Google
Maps, you and your students can become arm-chair explorers and cartographers with ease. Google Maps are a fun and visual way to help students understand geography concepts, map reading, location, and distance measurement. Besides using Google Maps to teach the fundamentals of mapping, like latitude and longitude, you can inspire students to investigate the world and to think spatially."
It is interesting that a map analytics and visualization software company called Mapsense obtained $2.5 million in funding in May 2015 and was subsequently acquired by Apple in
September 2015. "There are over 10 billion devices on the planet streaming location data on a daily basis. Mapsense's platform and developer tools help organizations quickly ingest and analyze billions of rows of location data to make more intelligent, locally targeted business decisions across the organization."
Location-based Learning is one of the "native" types of Mobile Learning defined by
Ambient Insight. This new Mobile Learning type emerged in 2009. Developers are designing learning experiences triggered at geotagged physical locations and in time.
Interestingly, the time-based triggers can provide learning experiences relating to the past, present, or future.
Location-based Learning products are built on location-based services (LBS) technology.
It is a type of knowledge transfer enabled by wireless network interfaces and sensors responding to the actions of a user at a specific location in space and time creating a situated learning experience. RFID chips, GPS chips, Indoor Positioning Systems, barcodes, Quick Response (QR) codes, Short Message Service (SMS) texts, and image recognition are used in Location-based Learning.
Location-based Learning is used in clinical healthcare environments, first responder situations, consumer and patient education, museums, tourist attractions, navigation applications, and in the travel industry.
Some of the most extraordinary innovations are now emerging around so-called indoor mapping and Indoor Positioning Systems (IPS) that work inside locations where GPS does not function. An IPS is a solution used to locate objects, navigation routes, or people inside a building using radio waves via beacons, low-level flashing LEDs, magnetic fields, acoustic signals, or other sensory information collected by mobile devices.
A company in Finland called IndoorAtlas garnered $10 million in funding in July 2015 from South Korea's SK Telekom Planet division. IndoorAtlas's solution utilizes what they call magnetic tagging. "The magnetic-positioning core offers developers unprecedented scale and freedom when building location-based apps."
Museums, galleries, and tourist venues are now avid adopters of IPS systems. For example, the American Museum of Natural History in New York City and the Royal BC
Museum in Victoria have both installed IPS for their patrons. The technology provides extensive information about exhibits (and the location of this exhibits) on the patron's mobile phone.

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

Cognitive Learning in the Spotlight: Spike in Investments in Behavior
Modification Companies
The synonymous relationship between behavior modification (Cognitive Learning) and knowledge transfer (learning) is widely understood by instructional design experts in the federal government (particularly the military) and corporate segments. Cognitive
Learning is a fundamental tenet in both the Bloom and Gagne taxonomies, two of the most prevalent instructional schemas used in systematic approaches to instructional design. Regardless of the fact that behavior modification is identical with knowledge transfer, with the exception of special education in the PreK-12 segment, the term is rarely explicitly used outside the government and corporate segments. It is no surprise that commercial Cognitive Learning companies have had a bumpy ride attracting private investment. On the surface, that appears to have changed dramatically in 2015.
Figure 3 - 1997 to Q1-Q3 2015 Investments Made to Cognitive Learning Companies (in
US$ Millions)

Prior to 2000, there were no recorded investments made to Cognitive Learning companies. Before the first three quarters of 2015, there was never more than $50 million invested in commercial Cognitive Learning companies in any given year; by the

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

end of the third quarter, a total of $226.5 million had been invested in behavior modification companies. There were eighteen deals made in the first three quarters of
2015, more than double the eight deals made in 2014.
To some extent, the $92 million invested in Virgin Pulse exaggerates the spike, but even without that deal, the surge in investments in Cognitive Learning companies was extraordinary. However, considering the erratic investment patterns in this type of company, it is too soon to tell if investors will continue to gravitate to these companies.
It is interesting that, except for one PreK-12 company, the investments made to behavior modification companies in 2015 were evenly divided between corporate-facing and consumer-facing companies.
We include the behavior modification company Virgin Pulse in our calibrations; they obtained $92 million in funding in May 2015, which is the highest investment made to a
Cognitive Learning company in the history of the industry. Lumos Labs garnered $32.5 million in 2011 and $31.5 million in 2012, both records for Cognitive Learning companies at the time.
Behavior modification is a staple in the training and education industry and used to improve (modify) employee performance. The Virgin Pulse product is a sophisticated
Cognitive Learning product, which is one of seven learning technology types defined in
Ambient Insight's Research Taxonomy. Behavior modification is a fundamental characteristic of learning theory. The terms "learning" and "behavior modification" are synonymous; behavior modification is structured learning.
Webster's Dictionary defines learning as "a modification of a behavioral tendency by experience." Learning is demonstrated by a change in behavior. Technology-based
Cognitive Learning products are behavior modification products designed to improve or enhance perception, working memory, comprehension, emotional states, decision making, fluid intelligence (general problem solving), and reasoning. They are metacognition products that enable users to modify cognitive behavior (learn) by understanding and manipulating the learning process itself.
A behavior modification company called Omada Health obtained $48 million in funding in
September 2015. They offer a range of methods to help corporate employees reduce the rates of preventable diseases. The program is a sixteen-week experience that includes online courses, online coaching, and game-based learning. "Over 16 weeks, each participant is guided through an online health lesson that tackles the physical, social, and psychological components of their condition. Interactive games reinforce learning and help participants make connections to real-world scenarios."
Another Cognitive Learning company called Headspace garnered $34 million in investment in September 2015. Headspace is a "digital health platform, providing guided meditation sessions and mindfulness training. With hundreds of hours of content, it is acknowledged as one of the most comprehensive secular programs for meditation and mindfulness. Headspace is your very own personal trainer, here to help you train your mind. Learn online, when you want, wherever you are, in just 10 minutes a day."

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

Sources of Investment Activity Data
Ambient Insight tracks private investments made to learning technology suppliers across the planet via a wide range of secondary sources including press releases, financial reports, investment firm sites, and targeted searches. We constantly monitor publicdomain investment tracking sites including CrunchBase, Ventures Africa, peHUB,
Xconomy, DealStreetAsia, VCCircle India, VatorNews, EducationInverstor (UK), China
Money Network, SinoBeat, Tech in Asia, AltAssets, VC4Africa, FinanceAsia, VentureVillage
(Germany), the Latin American Private Equity & Venture Capital Association (LAVCA),
SeedTable, the Asian Venture Capital Journal, DealCurry (India), and VentureBeat.
We also track public domain investment sources that focus on particular countries. For example, the top information source for learning technology investment and the commercial education technology market in China is a learning technology news website called Jiemo Media (JMDedu).

Investment Patterns in Context: The Longitudinal
Perspective
Investments in learning technology companies were quite rare until 1997 and 1998, despite the fact that the corporate eLearning (called online learning or online training at that time) market was in a boom phase. This all changed dramatically with the dawn of the dot.com era. While the investments made to learning technology companies spiked in
1999 and 2000, the total investment amounts were a tiny fraction of the money that went into other types of Internet-related technology companies.
Investments slowed to a trickle when the "perfect storm" hit. The dot.com meltdown,
9/11, and the recession (not to mention the enormous losses investors encountered with failed Internet companies) severely dampened the interest in learning technology companies. Since the learning technology market was essentially a US corporate phenomenon in 2000, the recession was the primary factor in the reduction in investments made to learning technology companies.
Corporations drastically reduced their training expenditures and the bottom fell out of the industry. Only four of the 51 learning technology companies funded in 1999 still exist; only three of the 60 companies funded in 2000 still exist.
Fast forward to 2015 and the industry is fundamentally different. The current international learning technology market is dominated by consumer buyers. The industry is now global and adoption is accelerating in what were once considered developing economies. For example, the highest five-year compound annual growth rates (CAGRs) for Self-paced eLearning (online courseware) are in Laos (48.7%) and Thailand (46.2%), followed by Uganda, Cambodia, and Ghana at 45.7%, 45.0%, and 44.5%, respectively.(Source: Ambient Insight's 2015-2020 Worldwide Self-paced eLearning Market:
Premium Edition.)

While PC-based self-paced products are still dominant in the academic segments and in corporations with large numbers of information workers, Mobile Learning is now the fastest growing learning technology type on the planet, particularly in so-called mobileonly countries. Mobile-only countries are heavily concentrated in Asia Pacific, Latin
America, and Africa.

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

The majority of innovation in learning technology is now focused on mobile technology.
Mobile augmented reality (AR) educational apps emerged in 2010 and had a rocky start.
The demand diminished in 2012-2013, but came roaring back in 2014 and the first three quarters of 2015; this is due to the proliferation of new augmentation hardware and software being developed and marketed by large companies like Microsoft, Sony, Google,
Intel, Apple, and Qualcomm and the booming demand for industrial and field-based augmented reality learning in the corporate and government segments across the planet.
A wave of new sophisticated (and relatively inexpensive) AR and virtual reality (VR) education and training products have come on the market in just the last two years.
Augmented education companies are starting to attract investment. A company in China called NeoBear (Winnie Mourinho) garnered $19.2 million in September 2015. They develop mobile augmented education apps for children.

Blowing Past the $3 Billion Threshold
"There are many ways to see this, but the big one is obvious: it’s never a bubble when everyone talks about it being a bubble."
Tucker Max, Tech in Asia, August 20, 2015
In the nine month period between January and September 2015, $3.76 billion was invested in learning technology companies across the globe. This is way north of the $3 billion threshold, which has never been breached in the history of the learning technology industry. Fifteen learning technology companies across the planet garnered investments amounts above $50 million in the first three quarters of 2015: Genshuixue, Xuebajun, NetDragon,
Mapbox, Affero Lab, Yuan Tiku, Gaosi Education, Udemy, TAL Education, Virgin Pulse,
HuJiang.com, Lamabang, Changingedu (Qingqing Tutoring), 17zuoye, and lynda.com.
Ten of these companies are based in China, four in the USA, and one in Brazil. These fifteen companies combined obtained $1.21 billion in the first three quarters of
2015.

The China-India-Brazil Juggernaut
Investor interest in China continues unabated, despite challenging economic conditions in the country. In the first three quarters of 2015, $1.2 billion went to 36 learning technology companies operating in China; this was 33% of the total investment that went to all companies combined around the globe. This is extraordinary considering that the total investments made to Chinese learning technology companies for the entire year of 2014 was $634.4 million, which was 26% of all global investments.
Learning technology investments in India are starting to heat up again. A total of $216.5 million went to 48 learning technology companies operating in India in the first three quarters of 2015. This is clear evidence of renewed interest in Indian companies.
For the entire year of 2014, only $83.0 million went to just 13 companies in India, which was a dramatic decrease from the year before.
In the first three quarters of 2015, there was continuing evidence of investor interest in
Brazilian learning technology companies. This is all the more significant considering the

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

current recession and severe currency devaluation in Brazil. In fact, investors are now describing the economic situation in Brazil as an environment conducive to investment.
Investments in Brazil between 2012 and 2014 were tepid at best and peaking at a meager $5.3 million in 2013. In the first three quarters of 2015, $107.4 million was invested in thirteen Brazilian learning technology companies, including the
$55 million that went to Affero Lab, the highest amount ever invested in a Brazilian learning technology company, so far. The government has dramatically reduced expenditures on public education ($2.4 billion in cuts as of July 2015) and non-profit academic-facing companies are struggling. Ironically, the for-profit educational providers are still thriving.

Opening the Floodgates: Unprecedented Deal Flow in
2015
The learning technology investment patterns were also unique in the first three quarters of 2015 due to the sheer volume of deals. A total of 340 deals were made for the entire year of 2014. The number of deals made in the first three quarters of 2015 was 39% higher than all of the deals made in 2014. The increase is even more striking when quarters are compared.
Figure 4 – 2010 to Q1-Q3 2015 Number of Private Investment Deals Made with Learning
Technology Suppliers

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

An analysis of monthly investment patterns provides inconclusive data. Correlation is not causation and it could be a coincidence that the spike in investment activity in June 2015 was at the beginning of the economic meltdown in China.
Compared to the rest of the months in 2015, the number of deals made in January and
February were relatively low. Deal flow picked up in March 2015 and remained relatively steady for the next seven months. There was a surge in the number of deals made in
June 2015 and a sharp spike in the investment total for that month.
Table 1 – 2015 Learning Technology Funding Amounts and
Total Number of Deals by Month
Funding
Amount

2015 Months

Number of Deals

January

$417,321,000

35

February

$455,738,000

34

March

$533,295,500

59

April

$282,392,800

43

May

$345,506,100

58

June

$702,661,100

65

July

$384,069,100

55

August

$257,253,400

56

September

$383,154,600

68

Totals for First Three
Quarters of 2015

$3,761,391,600

473

Investors overwhelmingly favored consumer-facing learning technology companies in the first three quarters of 2015; these companies accounted for the vast majority of funding and the highest number of deals. Just over $1.97 billion (53% of all global investments combined) went to consumer-facing companies in the first three quarters, which is double the $984.2 million invested in these companies in the entire year of 2014.
Of the 473 deals made in the first three quarters of 2015, 210 deals were made with consumer-facing companies, followed by corporate-facing suppliers at 100, and PreK-12 providers at 98 deals, respectively.

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

For the entire year of 2014, 124 consumer-facing suppliers were funded, which was a record at the time. Of the 210 deals made with consumer-facing learning technology suppliers in the first three quarters of 2015, 108 of the deals were with Mobile Learning companies. The volume of deals made to corporate-facing companies in the first three quarters of
2015 is more than double the investment made to these types of companies in the entire year of 2014; 41 deals were made in 2014 and 100 were made in just the first three quarters of 2015.
Figure 5 – 2012 to Q1-Q3 2015 Total Number of Private Investment Deals to Learning
Technology Companies by Target Customer

Investor interest in higher education learning technology suppliers is trending downward as of the end of September 2015 in terms of number of deals and investment amounts.
Investments made to healthcare-facing companies in the first three quarters of 2015 are virtually identical to the totals for the entire year of 2014.

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

Funding Amounts Over $50 million in First Three
Quarters of 2015
Until 2014, funding amounts over $50 million in single rounds were rare in the learning technology industry. There were no investments over $50 million in 2008 and 2009.
Echo360 was the only learning technology company to obtain over $50 million in 2010.
K12, Inc. was the only company in 2011 to garner more than $50 million and only one company (Desire2Learn) obtained more than $50 million in 2012. In 2013 and 2014, the patterns changed; three companies obtained over $50 million (Lynda.com, Open English, and Knewton) in 2013 and thirteen companies exceeded the $50 million threshold in
2014. This pattern appears to be holding. In the first three quarters of 2015, fifteen companies obtained funding of $50 million or over.
Table 2 – Learning Technology Companies that Obtained $50 Million or More in
Funding in the First Three Quarters of 2015 (in US$)
Company
Name

Funding
Amount

Date of
Funding

Product Type

Base
Operating
Country

Genshuixue

$50,000,000

March 2015

Collaborationbased Learning

China

Xuebajun

$50,000,000

March 2015

Digital Referenceware

China

NetDragon's Best
Assistant
Education

$52,500,000

January 2015

Mobile Learning

China

Mapbox

$52,550,000

June 2015

Digital Referenceware

USA

Affero Labs

$55,000,000

June 2015

Self-paced eLearning Brazil

Yuan Tiku

$60,000,000

March 2015

Mobile eLearning

China

Gaosi Education

$63,000,000

August 2015

Collaborationbased Learning

China

Udemy

$65,000,000

June 2015

Self-paced eLearning USA

TAL Education

$70,000,000

June 2015

Collaborationbased Learning

China

Virgin Pulse

$92,000,000

May 2015

Cognitive Learning

USA

HuJiang.com

$100,000,000

February 2015

Self-paced eLearning China

Lamabang

$100,000,000

March 2015

Digital Referenceware

China

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

Changingedu
(Qingqing
Tutoring)

$100,000,000

June 2015

Mobile Learning

China

17zuoye

$120,000,000

February 2015

Self-paced eLearning China

lynda.com

$186,000,000

January 2015

Self-paced eLearning USA

Total

$1,216,050,000

Several companies came close to the $50 million threshold in the first three quarters of
2015. For example, Coursera obtained $49.5 million in funding in August 2015. A
Chinese company called Tsingda eEdu Corporation garnered $49 million in February
2015. A Cognitive Learning company called Omada Health obtained $48 million in
September 2015 and the online language learning company Duolingo obtained $45 million in June 2015.
Funding amounts of $100 million (or more) are very rare in the learning technology industry. There have only been twelve learning technology companies that have obtained
$100 million (or more) in single rounds of funding in the last 19 years.


ElementK and Unext each obtained $100 million in 1999 at the height of the dot.com era and before the economic meltdown in 2000 and 2001.



In the wake of two economic downturns, there were no investments over $100 million between 2000 and 2010.



In 2011, K12, Inc. obtained $125 million in funding and in 2013, lynda.com garnered $103 million.



The China-based online tutoring company TutorGroup obtained $100 million in
February 2014. The investment was led by Alibaba, the dominant online retailer in
China.



In August 2014, Pluralsight garnered an astonishing $135 million in funding; this was the highest single amount invested in a learning technology company at the time. (Pluralsight had also obtained $2.5 million earlier in 2014 and $27.5 million in 2013.)



The breathtaking $186 million invested in lynda.com in January 2015 broke this record and still stands as the highest investment made to a learning technology company in the history of the industry

Four Chinese companies (HuJiang.com, Lamabang, Changingedu, and 17zuoye) garnered
$100 million or more in the first three quarters of 2015 as well. In 2014, only one company garnered over $100 million. In the first three quarters of 2015 alone, five companies have reached this threshold.

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Retail Education: Consumer-facing Companies
Still Attracting Investments
One trend that has remained stable over the last four years is the investor interest in consumer-facing learning technology companies. This trend is particularly evident in the data for the first three quarters of 2015. This spike is due in large part to the funding patterns in China and India and represents a new education distribution channel; effectively it is retail education.
In the first three quarters of 2015, consumer-facing companies accounted for the highest number of deals and the vast majority of funding. Over $1.97 billion went to consumerfacing companies followed by corporate-facing companies at $782.4 million and PreK-12 companies at $571.4 million, respectively.
Figure 6 – Full-year 2014 and Q1-Q3 2015 Private Investment by Target Customer Type

Online education providers in China and India now have massive user bases. These students/customers are bypassing the traditional academic outlets and buying learning products from commercial disruptors. Education is being sold as a product.


Founded in 2011, 17zuoye now reaches more than 14 million students/customers.
They garnered a breathtaking $120 million in investment in February 2015.

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns



New Oriental Education's Koolearn online learning portal in China had 10.7 million registered users as of August 2015. The users are spread out over the buying segments with a large base of children, a demographic the company says is increasing on average 35% a year. In July 2013, Yu Minhong, chairman of New
Oriental, stated in the press that "online education will account for 40% of the private education market in three to five years, from 10% now."



India's iProf test prep provider had 7.6 million students/customers in 2014. By early 2014, the company had raised $15 million in funding.



HuJiang, an online private language school in China, has 3 million active paying members and 70 million registered members "made up primarily of young, whitecollar workers, many who work for foreign-owned enterprises". They garnered
$100 million in funding led by Internet giant Baidu in February 2015.

In the early days of the industry, consumer-facing learning technology suppliers that were funded all failed within 2-3 years, largely due to the lack of consumer readiness for the products.
It is now abundantly clear that there is strong demand for digital learning products in the consumer segments across the planet and consumers are now avid buyers of digital education and training content. Online language learning is the top selling digital learning product type in every consumer segment across the globe.
There was virtually no investor interest in consumer-facing learning technology companies between 2003 and 2009. Investors started taking notice again in 2012 and
2013. In 2012, investors sank $626 million into consumer-facing learning technology companies, more than double from the year before.


In 2013, consumer-facing learning technology companies garnered $736.8 million, which was 44% of all money invested into learning technology companies on the globe.



In 2014, a total of $983.9 million was invested in consumer-facing companies; this was 40.5% of the total international investments in learning technology in
2014. This was a record high at the time.

In the first three quarters of 2015 alone, $1.97 billion was invested in consumer-facing learning technology companies; this was 52% of all funding that went to learning technology companies in the first three quarters and double the $983.9 million invested in consumer-facing companies in the entire year of 2014.

Which Consumer-facing Suppliers Attract Investment?
In the first three quarters of 2015, investors focused heavily on learning technology suppliers that sold self-paced courses to consumers. The striking pattern in these data is the dramatic spike in funding going to these companies compared to 2014 when "only"
$369.1 million was invested in Self-paced eLearning companies. In the first three quarters, investors poured $1.05 billion into suppliers that sold self-paced online courses to consumers.

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

By far, online language learning suppliers, test prep course providers, and early childhood learning suppliers attracted the most investment. Suppliers that sell supplemental academic content (particularly for the early grades) are also attracting increased investment.
The investor interest in online language learning suppliers is particularly prevalent in
China, South Korea, Japan, Thailand, Indonesia, and India. Test prep suppliers are attracting significant investment in "exam cultures" that have national matriculation exams. An impressive $261.2 million in funding went to consumer-facing suppliers selling Mobile
Learning products in the first three quarters of 2015. The amount only appears low in contrast with the large investments made to Self-paced eLearning companies. The investments made to Mobile Learning companies in the first three quarters of 2015 are higher than the investments made in the entire year of 2014.
The investments made to consumer-facing Digital Reference-ware suppliers in the first three quarters of 2015 are almost double the investments made in the entire year of
2014.
Figure 7 – Full-year 2014 and Q1-Q3 2015 Total Number of Private Investment Totals to
Consumer-facing Learning Technology Companies by Product Type

Note: The chart above is only for worldwide consumer spending

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

The 2015 investments (in terms of total funding amounts) made to consumer-facing learning technology companies in the first three quarters of 2015 are heavily concentrated in China. Private investments made to consumer-facing learning technology suppliers in India and Brazil are also trending upward.

Corporate-facing Suppliers Make a Comeback
There is now strong evidence of a renewed investor interest in learning technology suppliers that serve the corporate market. The vast majority of investments made to learning technology suppliers in the early days of the industry were made to corporatefacing suppliers. This faded fast starting in 2008.
In 2010, only $45.9 million was invested in corporate-facing learning technology companies. This more than doubled to $104.8 in 2011, but fell to $76.3 million in 2012.
Investor interest picked up considerably in 2013 with $209.7 million invested in corporate-facing suppliers. It picked up again in 2014, totaling $278.6 million. In just the first three quarters of 2015 alone, $767.9 million had been invested in corporate-facing learning technology companies, an increase of 175% over the entire previous year.
Figure 8 - 2010 to Q1-Q3 2015 Investments in Corporate-facing Learning Technology
Companies (in US$ Millions)

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

In 2014, there were 41 deals made with corporate-facing suppliers for a total of $278.6 million in funding. In the first three quarters of 2015 alone, corporate-facing learning technology suppliers across the globe garnered $782.4 million in funding; 100 deals were made with corporate-facing suppliers in the first three quarters of 2015.

Spike in Investments for Three Learning
Technology Products
One steady pattern over the last four years is the growing investor interest in three learning technology product types: Self-paced eLearning, Simulation-based Learning, and
Mobile Learning.
The investments in eLearning suppliers is driven in large part by the booming markets for online courseware in China, India, and Brazil. There is still high demand for online courses in Japan, South Korea, and Singapore but very few startups are getting funding.
The eLearning market is heavily commoditized in those countries and revenues are actually shrinking.
Figure 9 - 2012 to Q1-Q3 2015 Private Investments by Seven Learning Product Types (in
US$ Millions)

Note: The chart above is for worldwide spending across all seven buying segments

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

nvestors are now keen to fund learning technology suppliers in developing countries in
Asia and Africa. The top twenty countries with the highest eLearning growth rates in the world are Laos, Thailand, Uganda, Cambodia, Ghana, Rwanda, Mongolia, Myanmar,
Senegal, Nepal, the Dominican Republic, Kenya, Honduras, Sri Lanka, Vietnam, Ethiopia,
El Salvador, Tanzania, Zambia, and Bangladesh; nine out of twenty are in the Asia Pacific region and eight are in Africa. Eight of the top twenty have growth rates above 40%.
(Source: Ambient Insight's 2015-2020 Worldwide Self-paced eLearning Market: Premium Edition.)

There was a spike in funding going to Simulation-based Learning and Cognitive Learning
(behavior modification) suppliers in the first three quarters of 2015, but it is too soon to know if it is a sustainable pattern or just an anomaly. Both product types have received lackluster interest from investors in previous years.
That said, the boom in virtual reality technology has created an emerging cottage industry for VR education companies, defined as Simulation-based Learning suppliers by
Ambient Insight.


Boston-based Alchemy Learning has a product bundle called Alchemy VR designed for the PreK-12 segment. It includes hardware, software, teacher training, and custom app development. "Alchemy VR is Alchemy Learning’s end-to-end virtual reality solution for teachers and schools. Alchemy VR provides teachers and schools virtual reality hardware configured to be easily integrated into classrooms, a growing portal of educational virtual reality experiences, and adaptive webbased curriculum and learning management tools."



A company called Unimersiv focusses on educational VR apps and has over 20 apps available on their site. Their most popular VR app is Teleport: Google Street
View for VR. They had 20 VR "courses" available on their site as of July 2015.
They have a subscription-based business model.



Immersive VR Education has a range of educational VR apps including the Apollo
11 moon landing (and moon walking) experience. "We will cover a wide range of subjects including History, Geography, Biology, Mathematics, Medicine,
Astronomy, and Science in an engaging and fun manor which will inspire a new hunger for learning with our users." They support the headsets from Oculus,
Sony, and Samsung's smartphone-enabled headset.

These companies, and the use of retail virtual reality educational products, are quite new and it is too soon to tell if they will generate sufficient revenues to attract investors.

A Country Analysis for China, India, and Brazil
Investment activity in China has been a fixture in the learning technology investment patterns for the last four years. Investor interest in Indian learning technology suppliers lagged in 2014, but surged in 2015. The activity in Brazil is a very new pattern and it is too soon to tell if it is an anomaly or a stable pattern.
The irony in China and Brazil is that, so far, challenging economic challenges in those countries have not had an adverse impact on private investment (yet). In fact, investors are showing a greater interest in those countries because of the economic conditions, not in spite of them.

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

Combined, investments made to learning technology companies in China, India, and
Brazil totaled $1.54 billion in the first three quarters of 2015.

All Roads Still Lead to China
"There are 437 venture financing deals worth US$13 billion in Greater China during the third quarter, 88% higher than the last quarter in terms of deal value, according to numbers newly released by data tracker Preqin. During the second quarter, there were 252 venture deals worth a combined US$6.9 billion in
Greater China."
China Money Network, October 2, 2015
In September 2015, Tech in Asia's Steven Millward wrote that "China’s startup industry is still booming and the investment money is flowing in thick and fast despite worries over the country’s economic slowdown and stock market jitters."
The quote is true as of September 2015, but that is not to say that startups in China are confident about the sustainability of this funding. There is a significant degree of uncertainty going forward. Companies are particularly worried about add-on funding.
"The most exposed companies are the thousands who have added users at any expense and put off thinking about profits."
China entered into an economic meltdown in mid-2015 with a stock market crash and a devaluation of the yuan (in a government effort to boost exports). The depreciated yuan shrinks the dollar value of exit strategies. The Chinese government has slowed the launch of IPOs in the country. The meltdown has not had a noticeable impact in learning technology investment yet.
In the first three quarters of 2015, $1.21 billion was invested in 36 learning technology companies in China; $389.9 million went to fourteen Self-paced eLearning courseware suppliers, $366.3 million went to ten Mobile Learning suppliers, and $205.2 million went to six Digital Reference-ware companies.
The investor interest in learning technology companies operating in China is a relatively new trend; 2012 was the first hint of the interest in Chinese companies. TutorGroup obtained $15 million in April 2012 and the language learning startup 51Talk garnered a meager $2 million in December 2012.
There were only six investments made to learning technology companies in China in
2012. In 2013, 47 online education companies in China received funding from investors.
By the end of 2014, 36 companies operating in China had obtained funding. While 2014 saw a smaller number of deals, the investment total was more than double that of 2013.
A total of $634.4 million was invested in online education companies in China in 2014; this was just over 26% of all funding that went to all of the learning technology suppliers across the globe during the year.

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

By far, the largest amounts went to suppliers selling digital language learning products, online exam prep, and consumer-facing academic content (primarily for younger children). In China, parents pay for the instructional material used by their children in the schools. Even if the newly funded online education providers selling content that maps to the national curricula, it is the parents that are buying the products. (Source: Ambient
Insight's 2015-2020 China Self-paced eLearning Market.)

Table 3 - Learning Technology Companies in China that Obtained Funding in the
First Three Quarters of 2015 (in US$)
Company Name

Funding Amount

Date of Funding

Product Type

Gowell

$1,000,000

March 2015

Self-paced eLearning

Snapask

$1,800,000

August 2015

Mobile Learning

JueSheng.com

$2,000,000

March 2015

Digital Reference-ware

Kano

$2,400,000

May 2015

Self-paced eLearning

Zmlearn

$3,200,000

July 2015

Collaboration-based
Learning

UEI Online

$3,200,000

July 2015

Digital Reference-ware

WuXi Jin Xun Tong
(JXT)Technology

$3,366,000

April 2015

Self-paced eLearning

O2O

$4,800,000

March 2015

Self-paced eLearning

Yiguan Enterprise
Education Group

$6,400,000

August 2015

Self-paced eLearning

Guolairen Education
Technology

$7,200,000

July 2015

Self-paced eLearning

Satech (Beijing)
Network Education
Technology Limited

$10,000,000

January 2015

Mobile Learning

Knowbox

$10,000,000

July 2015

Mobile Learning

Qingtajiao.com

$13,760,000

July 2015

Self-paced eLearning

Scholastic Teaching

$16,000,000

May 2015

Self-paced eLearning

NeoBear (Winnie
Mourinho)

$19,200,000

September 2015

Mobile Learning

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

XueXiBao

$20,000,000

January 2015

Digital Reference-ware

Entstudy

$24,000,000

August 2015

Self-paced eLearning

Zhan.com

$29,000,000

April 2015

Self-paced eLearning

Xiaozhan Jiaoyu

$29,000,000

March 2015

Collaboration-based
Learning

Xiachfang

$30,000,000

July 2015

Digital Reference-ware

Lexue Education

$30,000,000

September 2015

Self-paced eLearning

Huakang Mobile Health

$32,000,000

April 2015

Mobile Learning

Zingren Doctor

$32,000,000

July 2015

Mobile Learning

Best Learning

$32,000,000

July 2015

Self-paced eLearning

Medlinker

$40,000,000

September 2015

Collaboration-based
Learning

Tsingda eEdu
Corporation

$49,000,000

February 2015

Mobile Learning

Genshuixue

$50,000,000

March 2015

Collaboration-based
Learning

Xuebajun

$50,000,000

March 2015

Digital Reference-ware

NetDragon's Best
Assistant Education

$52,500,000

January 2015

Mobile Learning

Yuan Tiku

$60,000,000

March 2015

Mobile eLearning

Gaosi Education

$63,000,000

August 2015

Collaboration-based
Learning

TAL Education

$70,000,000

June 2015

Collaboration-based
Learning

HuJiang.com

$100,000,000

February 2015

Self-paced eLearning

Lamabang

$100,000,000

March 2015

Digital Reference-ware

Changingedu (Qingqing
Tutoring)

$100,000,000

June 2015

Mobile Learning

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

17zuoye

$120,000,000

Total in China for
First Three Quarters of 2015

February 2015

Self-paced eLearning

$1,216,626,000

The total in China is higher considering the September 2015 investment in Baidu's online education spinoff Zuoyebang by two outside investment firms; the amount was not disclosed. Also TAL Education invested an "eight figure" amount in a preschool-facing app development company called Youban in May 2015.
Figure 10 – Q1-Q3 2015 Private Investment to Chinese Learning Technology Companies by Category (in US$ Millions)

The most significant investment pattern in the China learning technology market is the interest in language learning providers. China is now the top buying country of digital
English language learning products, not only in the Asia region, but in the world. The five-year compound annual growth rate (CAGR) for digital English language learning products in China is 23.6%; revenues for these products will spike to a breathtaking
$931.8 million in 2018, up from the $323.1 million reached in 2013. (Source: Ambient
Insight's "The 2013-2018 China Digital English Language Learning Market.)

Another major pattern in the investment activity in China is the funding going to new
Mobile Learning companies and the investments flowing into traditional online learning

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

companies that intend to use the funds to expand their catalog with Mobile Learning.
Investors are particularly attracted to companies that develop mobile English language learning apps and mobile edugames for young children.
Mobile healthcare education suppliers in China have just started to attract the attention of investors. A total of $366.3 million was invested in Mobile Learning suppliers in the first three quarters of 2015; this was 60% of the total funding that went to Mobile
Learning suppliers across the planet by the end of the third quarter. Almost a third of the funding going Mobile Learning companies in China went to companies focused on healthcare education.
Most commercial online learning providers focus on particular demographics or on specific content types. Their catalogs tend to offer a range of content designed for their target demographic. There are exceptions. HuJiang.com specializes in English language learning and caters to students of all ages, although the majority of their students are young working professionals.
China is the epitome of an exam culture. Over 10 million Chinese students take the high school entrance exam (known as the "Zhong Kao") every year. Over 9 million Chinese high school seniors take the national university entrance exam (known as the "Gao Kao") every year; 9.42 million students took the Gao Kao exam in 2015.
Ten of the 36 learning technology suppliers that were funded in the first three quarters of
2015 were online test prep suppliers. Test prep provider Yuan Tiku garnered the largest investment so far at $60 million. The Zhong Kao and the Gao Koa is not the only exams that providers focus on. A company called Xiaozhan Jiaoyu sells online test prep courses for global standardized exams including the SAT, ACT, TOEFL, IELTS, and GRE; they garnered $29 million in March 2015.
The most active investors in online education in China are the venture capital firms Gobi
Partners, GGV Capital, Temasek, DCM, Qiming Venture Partners, Yongjin Group,
Northern Light Venture Capital, Shunwei Capital, Weitoulu, ZhenFund, Matrix Partners
China, and IDG. The largest corporate investors are New Oriental, TAL Education,
Xueresi, Alibaba, Qualcomm, Baidu, Bertelsmann, and NetEase.
Baidu, Alibaba, and Tencent are the largest Internet companies in China and they all entered the commercial eLearning and Mobile Learning markets in 2013 and 2014 via acquisitions. Several other leading Internet companies entered the commercial learning technology market in the last two years including NetEase, Sohu, Renren, Kaixin,
Jiayuan, Sina Weibo, YY, NetDragon, Youku Tudou, and Kingsoft. All of their online learning businesses at launch were web-based; all of them are now adding mobile features and launching dedicated mobile products.
What is interesting is the diversity of the Internet companies now competing in the online education market in China. Baidu is the largest search engine in China. Alibaba and
Tencent are eRetailers. Jiayuan is a dating site, RenRen and Kaixin are social networks,
NetDragon is a game developer, Sohu is an online media and gaming company, NetEase is an IT giant, YY is a Skype-like platform, Sina Weibo is a media company with a
Twitter-like product, Youku Tudou is an online video provider, and Kingsoft is a frontoffice productivity software company.

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

To put this unusual ecosystem in perspective, imagine if Google, Google's YouTube,
Yahoo, eBay, Facebook, Microsoft, Microsoft's Skype, Gameloft, Twitter, Amazon, and eHarmony all entered the commercial learning technology market at the same time.
Despite the fact that the Internet giants are now competing directly in the online education markets in China with branded products, they continue to invest in third-party learning technology suppliers and are now major sources of private investment for learning technology suppliers.

Learning Technology Investment Activity in India
Heating Up
"I don’t think that funding for Indian start-ups will dry up. Given the interest in
India and the ecosystem, given the lack of commensurate opportunities in other parts of the world, I think funding for Indian entrepreneurs, both from commercial venture capital and philanthropic organizations, is on the upswing."
Roopa Kudva, Omidyar Managing Director, DealStreetAsia, September 1,
2015
A total of $216.5 million in investment went to 48 learning technology companies operating in India in the first three quarters of 2015. This is clear evidence of a renewed interest in Indian companies.
In 2012, only 10 learning technology companies in India were funded: a total of $36.4 million went to these companies for the entire year of 2012. Investor interest picked up considerably in 2013 with a total of $141.7 million going to 17 companies operating in
India.
A mere $83.0 million went to just 13 Indian companies in 2014, which indicated a diminishing interest among investors. If the investment activity in the first three quarters of 2015 is any indication, investors are turning their attention to India again.
Table 4 - Learning Technology Companies in India that Obtained Funding in the
First Three Quarters of 2015 (in US$)
Company Name

Funding Amount

Date of Funding

Product Type

BetterButter

$50,000

August 2015

Digital Reference-ware

LabInApp

$94,000

June 2015

Simulation-based
Learning

CampusKnot

$100,000

July 2015

Digital Reference-ware

Bodhi Health

$120,000

April 2015

Self-paced eLearning

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

Guiddoo

$200,000

June 2015

Mobile Learning

Prozo

$205,000

September 2015

Digital Reference-ware

Jay Robotix

$250,000

May 2015

Mobile Learning

Venturesity

$270,000

May 2015

Self-paced eLearning

Nayi Dishi Studios

$320,000

April 2015

Game-based Learning

Capabiliti (Qustn
Technologies)

$393,000

September 2015

Self-paced eLearning

Logic Roots

$400,000

April 2015

Game-based Learning

MockBank Learning

$400,000

September 2015

Digital Reference-ware

Daily Rounds

$500,000

February 2015

Mobile Learning

Zenparent

$500,000

May 2015

Mobile Learning

Edsix Brain Lab

$500,000

June 2015

Cognitive Learning

BabyChakra.com

$600,000

June 2015

Digital Reference-ware

OnlineTyari

$750,000

September 2015

Mobile Learning

MeetUniv

$920,000

May 2015

Collaboration-based
Learning

WAGmob

$955,000

August 2015

Mobile Learning

Impartus Innovations

$1,000,000

January 2015

Collaboration-based
Learning

Englishleap.com

$1,000,000

January 2015

Self-paced eLearning

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

Harness Handitouch

$1,000,000

March 2015

Mobile Learning

EduKart

$1,000,000

June 2015

Self-paced eLearning

Sigrid Education

$1,000,000

June 2015

Self-paced eLearning

Zoojoo.be

$1,000,000

August 2015

Cognitive Learning

CureJoy

$1,150,000

September 2015

Digital Reference-ware

UrbanPro

$2,000,000

May 2015

Collaboration-based
Learning

HealthyWorld.in

$2,000,000

January 2015

Digital Reference-ware

Purple Squirrel
Eduventures

$2,000,000

April 2015

Self-paced eLearning

Plancess Edu Solutions

$2,000,000

May 2015

Self-paced eLearning

CAKART.in
(Suphalaam)

$2,000,000

June 2015

Self-paced eLearning

SuperProfs.com

$3,000,000

February 2015

Self-paced eLearning

Applect Learning
Systems (MeritNation)

$4,000,000

June 2015

Self-paced eLearning

Reverie Language
Technologies

$4,000,000

August 2015

Digital Reference-ware

Brazen Careerist

$4,700,000

June 2015

Self-paced eLearning

Notesgen

$4,960,000

July 2015

Digital Reference-ware

iNurture

$5,000,000

January 2015

Self-paced eLearning

Vedantu

$5,000,000

May 2015

Collaboration-based
Learning

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

CultureAlley

$6,500,000

July 2015

Self-paced eLearning

Speakwell Enterprise

$10,000,000

March 2015

Self-paced eLearning

Healthifyme

$10,000,000

Two Rounds: May 2015 and June 2015

Mobile Learning

Toppr

$10,000,000

May 2015

Self-paced eLearning

Lybrate

$10,200,000

July 2015

Collaboration-based
Learning

U Education (UpGrad)

$16,000,000

January 2015

Self-paced eLearning

PaGaLGuy

$20,000,000

April 2015

Self-paced eLearning

Amazed Infotainment

$20,000,000

September 2015

Simulation-based
Learning

Think and Learn
(BYJU's Classes)

$28,800,000

June 2015

Self-paced eLearning

Simplilearn

$29,734,800

Two Rounds: January
2015 and April 2015

Self-paced eLearning

Total in India for First
Half of 2015

$216,571,800

The majority of investments made in India learning technology companies went to Selfpaced eLearning courseware suppliers. In the first three quarters of 2015, $141.2 million went to eLearning companies in India.
Like China, India is an exam culture and test prep startups are attracting investment.
Twelve of the 47 companies funded in the first three quarters of 2015 are test prep firms.
Simplilearn obtained two rounds of funding totaling $29.7 million in the first half of 2015; they specialize in professional certifications.
Toppr is another test prep startup in India and they garnered $10.0 million in May 2015.
Toppr specializes in test prep for college entrance exams. MeritNation obtained $4 million in June 2015; they offer wide range of test prep courses ranging from first grade to college boards.
Interestingly, a new learning technology accelerator call Edgild launched in September
2015 in India. It will provide seed and angel funding to startups beginning in January
2016; each selected startup will obtain up to $22,500 in exchange for a 10% stake.

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Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

Brazil Still Attractive Despite Headwinds
"PE/VC firms active in Latin America are putting money to work in new and follow-on deals, particularly in Brazil where an environment of adversity is creating new opportunities for investors."
Cate Ambrose, President & Executive Director, American Private Equity
& Venture Capital Association, September 9, 2015
In the first three quarters of 2015, there was clear evidence of an invigorated interest in
Brazilian learning technology companies. This would appear to be odd considering the current recessionary economy in Brazil. Yet, investors have always invested in education companies during economic slowdowns. Despite the lack of discretionary income, people tend to increase expenditures on education during slowdowns.
A total of $107.4 million had been invested in learning technology companies in Brazil by the end of the third quarter of 2015. The bulk of the investments ($75.1 million) went to
Self-paced eLearning courseware providers.
As of September 2015, Brazil is officially in a recession and the value of the Brazilian Real was the lowest since 2002 (thus making buyout targets more attractive). Investment experts often say that "technology investing isn’t directly correlated to macroeconomic trends", but these trends tend to prolong the funding process and have a significant impact in exit strategies.
According to the Latin American Private Equity & Venture Capital Association, private investment in the first half of 2015 in Brazil totaled $2.28 billion (69 deals), up from
$1.89 billion (50 deals) from the same period the year before. According to Brazil-based
BTG Pactual, "Buyout firms are seeking opportunities in some of the most resilient sectors in the economy like healthcare, financial services, and education."
The Brazilian government has sharply reduced education spending in the public schools but a full 70% of higher education students are in private institutions and just under half of PreK-12 students are in private schools. Consumers invariably spend more money on education during recessions, and the publicly-traded higher education firms are thriving despite the recession. Pearson is one of the largest PreK-12 private sistema (school) operators in Brazil and in July 2015, stated that "in Brazil, we expect a better year in our sistemas business and good growth in our English Language Learning franchises."
In July 2015, Germany-based Bertelsmann and Brazil-based Bozano Investimentos reported that they had over $100 million in investment funds earmarked for Brazilian education companies with a target endowment of up to $255 million.
There were very little investments (in terms of funding amounts) made to learning technology companies in Brazil between 2012 and 2014. Descomplica and Veduca were the only Brazilian learning technology companies to get funding in 2012 at $2 million and
$740,000, respectively.
Things picked up slightly in 2013 with 12 Brazilian learning technology companies garnering investments, garnering $5.3 million combined. Qranio obtained $400,000 and a company called xMile received $650,000. A test prep company called Rota dos

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33

Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

Conursos obtained $500,000 and the social learning company Izzui garnered $1.4 million. Macmillan Digital Education invested in two Brazilian learning technology companies in early 2013: Veduca and Easyaula. Each obtained $750,000. Veduca obtained an additional $480,000 from a private equity firm in late 2013.
The accelerator Startup Brasil was launched in August 2012 and announced their first cohort in August 2013. They fund startups from Brazil and other countries. In August
2013, Startup Brasil selected 56 companies in their first cohort; eleven were edtech companies and seven were from Brazil: Easyaula, EvoBooks, Kiduca, EduSynch,
MobGeek, Mundo de Aventura, and Profes. Each were funded with the equivalent of
$64,000.
Another edtech accelerator in Brazil is Start-Ed. In 2014, they funded seven companies, albeit in small amounts averaging $20,000 or less. AppProva, Árvore de Livros, Me salva!, PortPy, Silabe, Stoodi, Geekie obtained funding from Start-Ed. The Brazilian investment firm BR Education (Bozano and Bertelsmann) funded three learning technology companies in 2014: Qmágico, Passei Direto, and Evolve. BR Education
Ventures does not disclose funding amounts.
Table 5 - Learning Technology Companies in Brazil that Obtained Funding in the
First Three Quarters of 2015 (in US$)
Company Name

Funding Amount

Date of Funding

Product Type

HashLearn

$7,500

September 2015

Mobile Learning

NutriSoft

$46,200

January 2015

Mobile Learning

Edools

$100,000

May 2015

Self-paced eLearning

Profes

$1,000,000

January 2015

Self-paced eLearning

GoGeo

$1,300,000

August 2015

Digital Reference-ware

Navitoo

$2,000,000

February 2015

Mobile Learning

Kuepa

$2,000,000

September 2015

Self-paced eLearning

Passei Direto

$7,000,000

February 2015

Social Learning

Geekie

$7,000,000

May 2015

Self-paced eLearning

Descomplica

$7,000,000

June 2015

Digital Reference-ware

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34

Ambient Insight's Q1-Q3 2015 International Learning Technology Investment Patterns

EduK

$10,000,000

May 2015

Self-paced eLearning

PlayKids (Movile)

$15,000,000

June 2015

Mobile Learning

Affero Lab

$55,000,000

June 2015

Self-paced eLearning

Total in Brazil for
First Three Quarters of 2015

$107,453,700

Affero Lab is a corporate-facing learning technology company in Brazil. In June 2015, they obtained the highest investment ($55 million) ever made to a Brazilian learning technology company. Bertelsmann led the funding round and took a 40% stake in the company. Affero Lab is using the record-setting investment to expand into Europe; They are opening an R&D facility in Dublin in 2015.
PlayKids is a division of Movile, one of the largest media conglomerates in Brazil. The
PlayKids apps consistently rank in the top twenty bestselling apps in the app stores across the planet. They garnered $15 million in funding in June 2015, which is a relatively high amount in Brazil.

About Us
Ambient Insight is an ethics-based market research firm that identifies revenue opportunities for learning technology suppliers. We track the learning technology markets in 120 countries. Ambient Insight publishes quantitative syndicated reports that break out revenues by customer segment (demandside) and by product category (supply-side) based on our taxonomy and our proprietary Evidence-based Research Methodology (ERM). We specialize exclusively in learning technology used in the process of knowledge transfer.

www.ambientinsight.com

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